WVU business center partly funded by Kochs

CHARLESTON, W.Va. -- West Virginia University announced on Tuesday that it will receive $5 million in donations to create a new Center for Free Enterprise as part of its College of Business and Economics "to study the economic, political and social factors that increase prosperity."

The money will come from the Charles Koch Foundation and from WVU business school graduate Ken Kendrick and his wife, Randy.

Joshua Hall and Andrew Young, associate economics professors at WVU, will be co-directors of the new center.

"The new center will advance teaching and research on the roles that the principles and institutions of a free society play in creating widely shared prosperity and improving quality of life, and will complement more than a decade of [the College of Business and Economics] support for the study of free market economics," according to a WVU news release.

The center will also hire a managing director and fill at least five visiting faculty fellowships. It will also provide at least 17 students with four-year Ph.D. fellowships over the next five years.

Charles and David Koch, who head the Koch Foundation, have spent tens of millions of dollars to create and support a variety of groups that advocate conservative political positions, including Citizens for a Sound Economy, Citizens for the Environment, the Economic Education Trust and Americans For Prosperity.

They head Koch Industries, a company involved in oil refineries, chemicals and other companies. The company produces Brawny paper towels, Dixie cups, Georgia-Pacific lumber and Stainmaster carpets. Each of the brothers was worth $36 billion last year, according to Forbes magazine.

Jose "Zito" Sartarelli, dean of the WVU business school, said Tuesday that donors from any part of the political spectrum are not allowed to affect the school's curriculum.

"We have a very clear policy, which is a university-wide policy," Sartarelli said. "When any gifts and donations come in, the choice of personnel and the content of whatever they do is totally up to the university. We do not compromise on that."

Sartarelli said he talks to big donors directly and tells them, "If you cannot live within that policy, then just don't give."

The College of Business and Economics has also accepted donations from the Institute for New Economic Thinking, Sartaterlli said. That institute is run by George Soros, a billionaire with much more liberal economic views than the Koch brothers.

An Internet search found one mention of the Institute for New Economic Thinking funding research at WVU, for two graduate students in 2010.

"As long as donors are not willing to trying to insinuate themselves in the hiring process or the content of research, I think academic freedom is preserved," Sartarelli said. "Any person we hire from a gift has total academic independence."

Hall, one of the directors of the new center, co-authored the annual "Economic Freedom of the World" report from the Vancouver, Canada-based Fraser Institute last year. The institute has also received major contributions from the Koch Foundation.

In their 2013 report, Hall and two co-authors state, "The expanded use of regulation in the United States was accompanied with sharp reductions in ratings for components such as independence of the judiciary, impartiality of the courts, and regulatory favoritism.

"To a large degree, the United States has experienced a significant move away from rule of law and toward a highly regulated, politicized state," Hall and the others wrote.

Young, the other co-director of the new WVU center, taught economics at Emory University and the University of Mississippi between 2003 and 2009, before coming to WVU in the fall of 2009.

The first paper listed on Young's resume, published in 1999, advocates for the abolition of publicly funded education, according to an online summary. The paper, "Enterprising Education: Doing Away with the Public School System," was intended to "critically examine the accepted notion that primary education is a legitimate and necessary function of the state."

The article co-written by Young concluded "that the state provision of primary education cannot be justified ... and that market provision is a preferable alternative."

Throughout its history, WVU has been a state-funded and state-run university. Including its School of Medicine, WVU received more than $157 million in this year's state budget, according to the state Budget Office's website.

On Tuesday, WVU President Gordon Gee said in the school's news release, "We truly appreciate the generous gifts from the Kendricks and the Charles Koch Foundation in support of West Virginia University's Center for Free Enterprise. This gift will allow additional student and faculty research in this important area of study."

"Randy and I are delighted to partner with the Charles Koch Foundation in establishing the Center for Free Enterprise at WVU," Ken Kendrick said in the release. "I have been a lifelong entrepreneur and am very grateful for the opportunity to have started my business career in West Virginia many years ago. I believe supporting the Center is a great way to give back to WVU."

Kendrick is the founder of Datatel Inc., a company that develops software for managing technology for colleges and universities. He is also the managing partner of Major League Baseball's Arizona Diamondbacks. The Kendricks have made several donations to WVU, some for more than $1 million, for philanthropic projects and sports programs since 2005.

Richard Fink, president of the Charles Koch Foundation, said, "Talented scholars working together to produce solid research is an exciting and powerful force for progress.

"By bringing together thoughtful academics, WVU's Center has the potential to make significant contributions to our understanding of free societies and how they help people improve their lives."

The Koch Foundation also funds the Public Policy Foundation of West Virginia, and has funded several positions in the WVU business school.

The foundation published a book by WVU economic professor Russell Sobel, "Unleashing Capitalism," in 2007. The book was embraced by several West Virginia policy leaders, including then-Gov. Joe Manchin. Others questioned some of its conclusions, including Sobel's argument that mine safety laws often harm coal miners by lowering wages, but do little to prevent major disasters.

Sobel left WVU abruptly in the middle of the fall 2011 semester, and is now a visiting professor at The Citadel military college in South Carolina.

Another Koch-funded group, Americans for Prosperity, recently formed a chapter in West Virginia and is paying for widespread television and Internet ads attacking Rep. Nick J. Rahall, D-W.Va., who is running for re-election.